India, Bangladesh sign historic land boundary agreement

India's Prime Minister Narendra Modi (L) presents a ship's wheel to Bangladesh's Prime Minister Sheikh Hasina (R) in Dhaka on June 6, 2015. [Photo/Agencies]

INCREASE IN TRADE

The two countries are looking to boost trade and security along the border and to fight human trafficking.

India's announcement of a $2 billion new credit line to Bangladesh follows a $1 billion assistance it provided in 2011 for infrastructure development.

Among other investments, Adani Power Limited of India nce Power Limited of India signed deals worth over $4.5 billion with state-run Bangladesh Power Development Board (BPDB) to develop six units of power plants to produce 4,600 MW of electricity.

Reliance will invest $3 billion to produce 3,000 MW power, while Adani will set up two coal-fired plants with a total capacity of 1,600 MW, costing more than $1.5 billion.

"Bangladesh will be able to more than double power imports from India to 1,100 MW from 500 MW at present," Modi said.

Aggregate trade between India and Bangladesh stood at $6.9 billion for the 2014-2015 fiscal year. However, trade is heavily in favour of India with its exports to Bangladesh at $6.2 billion.

India has accorded Bangladesh the status of zero-tariff imports for all but 25 tariff lines.

"India will invest more as Bangladesh today offered an exclusive economic zone for India and this investment will help to narrow the gap," Modi said.

Cumulative Indian investments in Bangladesh stood at $2.5 billion in 2012-13.